| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Atherean Asset Management initiated a position in Constellation Software during Q1 2026, taking advantage of a substantial share price decline driven by concerns about AI disruption in enterprise software. The manager believes these concerns are overstated for Constellation's portfolio of specialized vertical market software businesses that serve niche industries like transit authorities, dental practices, and municipalities. These businesses provide mission-critical operational software with high switching costs, strong customer relationships built on service and domain expertise, and recurring revenue streams that are less vulnerable to AI displacement than general enterprise software. Constellation has compounded free cash flow per share at over 20% annually for three decades through disciplined capital allocation, acquiring and holding vertical software businesses long-term while allowing autonomous operation. The manager continues seeking high-quality companies that have become inexpensive due to temporary market concerns. Market volatility from geopolitical shocks and oil price spikes created economic uncertainty, but the manager expects a moderate growth, moderately inflationary environment for the intermediate term.
Focus on high quality companies that have become inexpensive due to temporary market concerns, exemplified by the new position in Constellation Software where AI disruption fears created an attractive entry point for a proven capital allocator with durable competitive advantages.
We believe that we are in a moderate growth, moderately inflationary environment for the intermediate term.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 27 2026 | 2026 Q1 | CSU.TO | AI, energy, Enterprise Software, Quality, small caps, value | CSU.TO | Atherean initiated a position in Constellation Software, capitalizing on AI disruption fears that drove down the elite software acquirer's valuation. The manager believes concerns are overstated for Constellation's specialized vertical market software businesses with high switching costs and domain expertise. The firm continues hunting for quality companies made temporarily inexpensive by market overreactions. |
| Jan 21 2026 | 2025 Q4 | GOOGL | Economic Growth, inflation, Margin Debt, mid cap, Risk Appetite, small cap, Speculation, Valuations | - | Atherean maintains valuation discipline amid 5.3% GDP growth and elevated S&P 500 multiples at 22x forward earnings. Speculative sentiment is rampant with margin debt up 35% to $1.2T. They took no new positions in Q4, preferring lower-multiple stocks with steady growth over higher-multiple names dependent on spectacular futures in this overheated market environment. |
| Oct 28 2025 | 2025 Q3 | MSFT | AI, Bubbles, Concentration, small caps, Speculation, value | - | Atherean Asset Management sees extreme market speculation reminiscent of historical bubbles, with AI driving unprecedented concentration in mega-cap stocks. Despite acknowledging AI's transformative potential, they question investment economics and maintain disciplined value approach focused on durable businesses with solid cash flows, positioning as long-term investors avoiding speculative trends. |
| Jul 24 2025 | 2025 Q2 | MO, ULTA | Buybacks, dividends, global, small caps, value, volatility |
MO ULTA |
Atherean added two value-oriented positions during market volatility: Altria Group for its 10% free cash flow yield and comprehensive capital returns, and Ulta Beauty for its dominant market position and growth potential through new stores and buybacks. Both investments emphasize strong cash generation and shareholder-friendly capital allocation in a supportive macro environment. |
| Apr 28 2025 | 2025 Q1 | VT | diversification, global, long-term, value, volatility | - | Global diversification proved valuable as non-U.S. equities outperformed declining U.S. markets in Q1. Despite recent volatility and rich mega-cap valuations, Atherean maintains long-term U.S. bullishness, citing historical resilience through numerous market crashes. The firm continues value-focused investing with price discipline and appropriate asset allocation. |
| Jan 21 2025 | 2024 Q4 | - | asset allocation, diversification, large cap, small cap, Valuations | - | Atherean advocates diversified asset allocation over concentrated large-cap exposure after the S&P 500's second straight 25% year. With small-caps and international markets significantly underperforming, the manager emphasizes historical asset class rotation patterns and current S&P 500 valuations implying 7-8% forward returns, suggesting large-cap outperformance may reverse. |
| Oct 30 2024 | 2024 Q3 | - | Market Cycle, Portfolio Management, Quality, valuation, value | - | Atherean maintains disciplined value approach amid richly valued markets, making no new equity additions this quarter. Focus remains on holding high-quality companies with monopolistic characteristics rather than selling at high valuations, as attractive entry points are statistically rare. Portfolio trades below S&P 500 valuation despite challenging environment. |
| Jul 31 2024 | 2024 Q2 | SBR | AI, Bubble, energy, megacaps, oil, Royalty Trusts, small caps, valuation | SBR | Atherean warns of equity market bubble driven by AI hype, with CAPE ratios near all-time highs. They avoid overvalued megacaps, instead focusing on reasonably-priced securities like Sabine Royalty Trust in oil and gas. Geopolitical dynamics favor U.S. energy independence, making royalty trusts attractive as low-cost toll collectors on production. |
| Apr 30 2024 | 2024 Q1 | AAPL, AMZN, CSCO, GOOGL, META, MSFT, NVDA, ORCL, TSLA | Concentration, growth, Investment Philosophy, large cap, portfolio construction, turnover, value | - | Atherean Wealth Management employs concentrated value investing with 15-25 stock portfolios, emphasizing intrinsic value over traditional growth/value classifications. The firm took no new positions in Q1 2024, focusing instead on explaining their philosophy to newer clients. They expect continued high-growth, high-rate environment while questioning sustainability of mega-cap earnings growth. |
| Jan 31 2024 | 2023 Q4 | AMP | Buybacks, Financial Services, Quality, value, Wealth management | AMP | Atherean initiated Ameriprise in Q4, viewing it as quality at a reasonable price. The pure-play wealth manager partners with 10,000 advisors serving two million clients, returning 85% of cash flow to shareholders with strong growth metrics. Despite mixed economic signals and persistent inflation risks, they see long-term wealth management tailwinds from growing investable assets. |
| Oct 31 2023 | 2023 Q3 | CMI | compounders, dividends, industrials, Quality, small caps, value | CMI | Atherean focuses on quality compounders amid unusual market conditions where treasury yields exceed equity earnings yields. Small-cap valuations appear attractive with the S&P 600 at eleven times forward earnings. The firm added Cummins, a market-leading engine manufacturer with strong fundamentals, conservative balance sheet, and consistent shareholder returns trading at attractive valuations. |
| Jul 28 2023 | 2023 Q2 | CNI | AI, Bubble, Canada, infrastructure, Railroads, Transportation, value | CNI | Value-focused manager warns of AI bubble while investing in essential infrastructure. Initiated Canadian National Railway position based on railroad monopoly characteristics, 30%+ margins, and operational efficiency from Precision Scheduled Railroading. Prefers mundane, necessary businesses over disruptive technologies that attract excessive capital. Constructive on long-term growth despite expecting higher inflation than Fed targets. |
| Apr 28 2023 | 2023 Q1 | - | Banking, credit, Debt, inflation, rates, value |
MLM CNI CN AMP |
Concentrated value manager stayed inactive in Q1 2023, maintaining patient approach after adding eight positions in 2022 during market dislocations. Highlights banking sector risks from rate-driven asset-liability mismatches and fiscal concerns with U.S. debt at 120% of GDP. Philosophy centers on exploiting short-term thinking through time arbitrage and purchasing quality companies below intrinsic value. |
| Jan 30 2023 | 2022 Q4 | ADBE, CPRT, CVNA, GOOG, IAA, KAR, MKL, OCSL | Alphabet, Market Downturn, Portfolio Management, Quality, technology, value |
GOOGL KAR |
Value manager capitalized on 2022 market sell-off to add quality positions including Alphabet at decade-low valuations and transformed KAR Global trading at stale multiples. Maintains focus on durable businesses with substantial margin of safety, viewing technology oversell as creating opportunities in select names while avoiding speculative bubble casualties. |
| Oct 28 2022 | 2022 Q3 | CHTR | Broadband, Buybacks, Cable, Capital Allocation, interest rates, value | CHTR | Atherean targets companies with strong cash flows and aggressive capital return programs in the current higher rate environment. The firm initiated Charter Communications in Q3, attracted by its 35% free cash flow growth and massive share buyback program. Manager favors cable companies over telecom in the infrastructure convergence battle due to superior capital allocation discipline and existing infrastructure advantages. |
| Jul 29 2022 | 2022 Q2 | ADBE, LGIH, V | Cyclical, growth, Homebuilders, inflation, technology, value |
ADBE LGIH |
Atherean sees unique buying opportunities in both growth monopolies like Adobe now trading at reasonable valuations and oversold cyclicals like homebuilder LGI Homes. The firm added four new positions in H1 2022, believing current market dislocation creates bargains not available in over a year despite recession fears. |
| Apr 29 2022 | 2022 Q1 | CPRT | Equity Markets, growth, inflation, interest rates, Recession, Valuations | CPRT | Atherean targets resilient growth companies in the current low-growth environment, viewing recent market volatility as creating buying opportunities. They initiated a position in Copart Inc, a vehicle salvage broker with strong competitive moats and consistent high margins, believing high-quality growth companies are favorably priced following the equity market pullback. |
| Jan 31 2022 | 2021 Q4 | SCCO | commodities, Copper, growth, inflation, rates, value | SCCO | Value manager navigating inflation and rising rates by investing in attractively valued companies positioned for current macro trends. Added Southern Copper Corp at reasonable valuation, betting on strong copper demand from electrification and construction against constrained supply. Believes commodity producers with market-driven pricing power are well-positioned for sustained inflation environment while avoiding overpriced growth stocks vulnerable to rate increases. |
| Oct 30 2021 | 2021 Q3 | BRK/A, CACC, CRMT, CVNA, LAD, SC | Auto Finance, inflation, small cap, Supply Chain, Used Autos, value | CRMT | Value-focused manager initiated position in America's Car-Mart during Q3 2021, finding opportunity in despised used car retail sector. Emphasizes buying satisfactory companies at great prices amid challenging environment of high valuations and irrational sentiment. Expects Fed rate hikes to favor low-multiple stocks over high-multiple growth names in inflationary environment. |
| Jul 29 2021 | 2021 Q2 | DFS, FF, ITIC, SYF | Banking, Chemicals, inflation, insurance, interest rates, small caps, value |
ITIC FF |
Small-cap value manager initiated two new positions under $18 market cap while expressing caution about elevated market valuations and inflation risks. Strategy focuses on exploiting inefficiencies in neglected small-cap securities with strong balance sheets and pricing power. Believes Fed will remain accommodative despite inflation concerns due to low-growth environment and yield curve risks. |
| Apr 30 2021 | 2021 Q1 | PRU | commodities, fiscal policy, inflation, interest rates, Life Insurance, value | PRU | Value manager navigating overvalued markets by focusing on out-of-favor sectors like life insurance. Added Prudential Financial at attractive valuation with strong capital return program. Concerned about inflation already evident in commodities and potential fiscal-monetary collision. Expects current economic strength to be temporary and stimulus-dependent. |
| Jan 30 2021 | 2020 Q4 | SAFT, SYF | Banking, inflation, insurance, interest rates, Valuations, value |
SYF SAFT |
Value-focused manager views current market as driven by money supply inflation, with S&P 500 valuations at dangerous extremes. Added banking and insurance positions as reasonably priced alternatives. Strategy emphasizes bottom-up security selection in sectors with tangible assets and attractive valuations while avoiding overvalued areas of the market. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIManager believes AI disruption concerns in enterprise software are overstated, particularly for specialized vertical market software businesses that provide mission-critical services with high switching costs and domain expertise that general-purpose AI tools cannot easily replicate. |
Enterprise Software Disruption Vertical Software |
Enterprise SoftwareConstellation Software's portfolio of specialized vertical market software businesses serves niche industries with mission-critical applications, high switching costs, and strong customer relationships built on service and domain expertise rather than just product functionality. |
Vertical Software SaaS Niche Markets | |
| 2025 Q4 |
Risk AppetiteManager emphasizes disciplined risk management through cycle awareness rather than market timing. Fund maintains cash cushion during high-risk periods and deploys capital countercyclically. Approach focuses on behavioral edge by having cash available when fear creates best entry points and avoiding leverage that leads to forced selling. |
Leverage Cash Volatility Positioning Discipline |
ValuationsEquity valuations remain elevated with the S&P 500 trading near 23x forward earnings, well above its long-term average of 15.6x. High valuations may increase market sensitivity to earnings disappointments and tend to constrain longer-term returns, reinforcing the importance of selectivity. |
Multiples Premium Earnings Risk Selectivity | |
| 2025 Q3 |
AIManager believes AI is substantially transformative technology that will increase productivity globally, but questions the economics and return on investment. Compares current AI investment to historical bubbles, noting trillions projected for data centers with unclear tangible payoff. |
Data Centers Productivity Investment Economics Infrastructure |
ValueFirm maintains value-oriented investment principles focused on companies with durable businesses and solid cash flows. Emphasizes being investors not speculators, sticking to core principles regardless of market irrationality. |
Durable Cash Flows Principles Long Term Quality | |
| 2025 Q2 |
TobaccoAltria is a mature business in the cigarette, cigar and smokeless tobacco industry with operating margins of about fifty percent. While the cigarette market in the United States is in decline, the smokeless tobacco market is experiencing growth, and the company has been able to hold revenues relatively steady. |
Tobacco Smokeless Cigarettes Mature Margins |
BeautyUlta Beauty has a strong brand presence in the U.S., holding about a twenty percent market share in the cosmetics and fragrance industry. The company remains in a growth phase, investing about a third of its operating cash flow into new store openings while returning the remainder to shareholders. |
Beauty Cosmetics Retail Growth Market Share | |
BuybacksBoth new investments feature significant capital return programs. Altria returns effectively all of its free cash flow to shareholders via stock buybacks and dividends, while Ulta returns operating cash flow remainder through stock buybacks after store investments. |
Buybacks Capital Return Shareholders Cash Flow | |
| 2025 Q1 |
GlobalNon-U.S. equities substantially outperformed U.S. counterparts in Q1, with EAFE up 7.0% while S&P indices declined. Strict global diversification would have paid off handsomely as a market-cap weighted global equity portfolio was down only 1.0% for the quarter. |
Diversification International EAFE Outperformance |
ValueManager emphasizes continuing focus on value and price discipline in portfolio management. They believe U.S. equity markets, particularly mega-cap growth stocks, had been richly valued and that this bubble was ripe for disruption. |
Price Discipline Valuation Bubble Growth | |
| 2024 Q2 |
OilThe manager believes the U.S. oil and gas sector will play a critical role as geopolitical dynamics force the U.S. toward becoming less dependent on foreign countries for natural resources. They focus on royalty trusts as attractive investments due to negligible expenses and no capital expenditures, making them toll collectors on oil and gas production. |
Royalty Trusts Energy Independence Natural Gas Geopolitical Production |
AIThe manager expresses significant concerns about the hype surrounding the current AI revolution and resulting exuberant enthusiasm toward anything artificial intelligence-related. They draw parallels to the internet bubble of the late 1990s, warning about excessive valuations driven by AI enthusiasm. |
Bubble Hype Valuation Technology Speculation | |
| 2024 Q1 |
ValueThe manager extensively discusses their value investing philosophy, emphasizing purchasing securities at favorable prices relative to intrinsic value using earnings, cash flow, and book value models. They critique traditional growth/value index construction methodologies as flawed. |
Valuation Intrinsic Value Cash Flow Book Value Economic Moat |
| 2023 Q4 |
Wealth ManagementThe manager discusses Ameriprise as a pure-play financial advice company partnering with over ten thousand independent financial advisors who manage wealth for over two million individuals and institutions. They view the wealth management business as attractive long-term despite temporary headwinds, noting growing investable assets and higher margins compared to bank-owned competitors. |
Financial Advisors Asset Management Financial Planning Wealth Management |
| 2023 Q3 |
ValueThe manager emphasizes investing in attractively priced companies with strong fundamentals. They highlight that the S&P 600 small cap index trades at a forward P/E of just over eleven, near its lowest level since the financial crisis, while treasury yields exceed equity earnings yields for the first time since the late 1990s during economic growth. |
Valuation Small Caps Earnings Yield P/E Ratios |
QualityThe firm focuses on long-term compounders with steady cash flows, wide economic moats, strong balance sheets, and consistent histories of effective cash flow reinvestment. Their Cummins investment exemplifies this approach, highlighting the company's conservative balance sheet, consistent dividend growth, and strong market position. |
Compounders Cash Flow Balance Sheet Moats | |
DividendsThe manager values companies that return capital to shareholders through dividends and share buybacks. Cummins has returned almost two-thirds of operating cash flow to shareholders and has been steadily increasing its dividend since the late 1990s, demonstrating the type of shareholder-friendly capital allocation the firm seeks. |
Capital Return Dividend Growth Shareholder Returns | |
| 2023 Q2 |
RailroadsNorth American freight railroads are attractive due to operational efficiency from Precision Scheduled Railroading, high margins exceeding 30%, monopolistic characteristics, and substantial cost advantages over trucking. The manager views railroads as durable businesses providing essential services with pricing power and reasonable valuations. |
Transportation Infrastructure Monopoly Pricing Power Efficiency |
AIThe manager believes artificial intelligence represents an emerging bubble similar to historical technology bubbles in automotive, airline, and internet sectors where most capital was destroyed. They prefer to avoid AI-focused investments and instead focus on companies that will benefit from AI efficiencies without being AI developers. |
Bubble Technology Valuation Disruption | |
ValueThe investment philosophy focuses on purchasing companies at substantial discounts to intrinsic value in mundane, less interesting industries that provide necessary goods and services rather than wants. This contrasts with popular disruptive technologies that attract excessive capital and reduce required returns. |
Intrinsic Value Discount Contrarian Essential Services | |
| 2023 Q1 |
Credit StressThe letter extensively discusses bank failures including Silicon Valley Bank and UK pension crisis, both casualties of rapidly-rising interest rates. Banking crises are described as periodic and frequent throughout history, related to asset-liability management failures. |
Banking Interest Rates Duration Risk Liquidity Leverage |
InflationThe manager discusses how high inflation would be in the federal government's best interest to reduce debt-to-GDP ratios, noting this has been the historical way for governments to resolve fiscal problems. The bond market would react negatively if this were perceived as Fed policy. |
Debt Monetary Policy Bond Market Fiscal Policy | |
ValueThe investment philosophy centers on purchasing securities at significant discounts to intrinsic value, with patience and discipline. The manager describes exploiting short-term thinking through time arbitrage and maintaining concentrated positions for multi-year to multi-decade horizons. |
Intrinsic Value Patience Concentration Long-term | |
| 2022 Q4 |
ValueManager took advantage of market downturn to upgrade portfolio with new positions in high-quality stocks that became cheapest in many years. Believes in absolute valuation over relative valuation, focusing on companies trading below intrinsic value with substantial margin of safety. |
Value Margin of Safety Undervalued Absolute Valuation |
TechnologyAdded position in Alphabet after years of waiting for sufficient margin of safety. Believes Alphabet is durable business among FAANG stocks that will survive and prosper, unlike others that may be disrupted. Views current market sentiment as causing technology stocks to become irrationally oversold. |
Technology FAANG Alphabet Innovation | |
| 2022 Q3 |
BuybacksManager emphasizes companies that return capital to shareholders through stock repurchases, particularly highlighting Charter Communications which has repurchased over 40% of shares since 2016 and 7.2% in the first half of 2022 alone. Views aggressive share buyback programs as attractive in a higher interest rate environment. |
Share Repurchases Capital Return Share Count Reduction |
BroadbandDetailed analysis of the cable vs telecom competitive landscape, with manager favoring cable companies like Charter Communications over telecom companies in the convergence battle. Believes cable companies have structural advantages through existing infrastructure and superior capital allocation discipline. |
Cable Fiber Infrastructure Telecom | |
RatesManager discusses the Fed's aggressive rate hiking cycle with five rate increases since March 2022, totaling significant tightening. Believes the Fed may have already accomplished price stability objectives but acknowledges it's too soon to know for certain given the rapid pace of increases. |
Federal Reserve Interest Rates Monetary Policy | |
| 2022 Q2 |
HomebuildersManager took position in LGI Homes, viewing homebuilding stocks as oversold due to macro behavioral biases from 2008 housing crisis. Believes entry-level housing demand remains strong as home ownership is more attractive than renting given 15% rent increases. |
Housing Cyclical Entry Level |
GrowthManager sees unique opportunity in growth stocks with monopolistic characteristics that have become purchasable due to rising rates. Adobe represents this category, trading at forward P/E below 30 versus historical 50+ multiples. |
Monopolistic Adobe Valuation | |
| 2022 Q1 |
GrowthManager believes companies demonstrating ability to grow revenues and profits across economic conditions are especially attractive in low-growth environments. Recent equity market pullback has left many high-growth companies oversold and underpriced, presenting favorable buying conditions. |
Growth Revenue Profits Economic Conditions |
Auto AftermarketTook position in Copart Inc, a vehicle salvage broker with 19% annualized revenue growth since going public. Company benefits from high barriers to entry due to zoning restrictions and network effects from its auction platform position in an effective duopoly. |
Salvage Auction Vehicles Network Effects | |
| 2021 Q4 |
InflationManager believes sustained inflation over the next few years is plausible given long-term structural trends in labor markets and productivity. The economy is approaching full potential with consumer goods already running above capacity. |
Inflation CPI PCEPI Price Levels Monetary Policy |
CopperTook new position in Southern Copper Corp in Q4. Strong demand from construction, electrical networks, and vehicle electrification. Supply constraints from water shortages and political conflicts in Chile and Peru create barriers to new mining projects. |
Copper Mining Electric Vehicles Supply Constraints Commodities | |
RatesRising interest rates in response to inflation will provide headwinds for valuations, particularly for highly-priced growth stocks. Fed policy adjustments continue in response to new inflation data affecting market volatility. |
Interest Rates Fed Policy Growth Stocks Valuations Monetary Policy | |
| 2021 Q3 |
Used AutosManager initiated position in America's Car-Mart, viewing the used car retail business as containing attractive opportunities despite being consistently despised by Wall Street. The company operates in the integrated sales and sub-prime finance segment with conservative capital structure and high profit margins. |
Used Cars Auto Finance Retail Sub-prime CRMT |
InflationManager discusses ongoing inflation debate and believes probability of Fed rate hikes within next two years is substantially higher. Expects less interest-rate-sensitive assets like low-multiple stocks and real assets to outperform in inflationary environment. |
Fed Interest Rates Cost-push Demand-pull Real Assets | |
ValueManager emphasizes buying satisfactory companies at great prices rather than great companies at not-so-great prices. Focuses on finding reasonably-priced stocks in challenging market environment with high valuations. |
Valuation Price-to-earnings Book Value Multiple | |
| 2021 Q2 |
InflationManager provides detailed analysis of inflation risks, distinguishing between consumption-based inflation (Fed's focus) and asset price inflation. Believes Fed will tolerate multiple quarters of inflation before raising rates due to 2% target mandate and secular low-growth environment. Sees asset bubbles forming from excess liquidity. |
Inflation Fed Policy Asset Bubbles Liquidity Interest Rates |
ValuePortfolio construction emphasizes small-cap value stocks selected through bottom-up analysis. Manager believes these factors represent systematic risks for which they will be appropriately compensated. Focus on companies with strong moats and pricing power in inflationary environments. |
Value Investing Small Caps Bottom-up Analysis Moats Pricing Power | |
Small CapsOverweighting small-cap stocks due to organizational advantages and market inefficiencies. Small-cap stocks are neglected by sell-side analysts and too small for institutional investors, creating opportunities for enterprising investors. Both new Q2 positions were small-cap stocks under $18 market cap. |
Small Caps Market Inefficiencies Active Management Analyst Coverage | |
RatesDetailed analysis of interest rate environment and Fed policy. Believes probability of rate increases is higher than a quarter ago but Fed will maintain accommodative stance. Sees downward pressure from excess banking liquidity and inverted yield curve risks limiting Fed's ability to raise rates aggressively. |
Interest Rates Fed Policy Yield Curve Banking Liquidity | |
| 2021 Q1 |
InflationManager believes significant inflation has already occurred, citing 87% rise in commodity index, 70% silver gain, and 89% copper increase over 12 months. Concerned about fiscal-monetary collision where Fed may need to tighten policy to combat inflation from massive fiscal spending. |
Commodities TIPS Monetary Policy Fiscal Policy Fed |
Life InsuranceIndustry became out of favor during pandemic due to low rates and mortality fears, with many stocks trading below 50% of tangible book value. Manager sees tailwinds including favorable interest rate environment and increased consumer demand for protection products. |
Insurance Interest Rates Valuation Demographics | |
ValueManager continues searching for reasonably-priced equities but finds limited supply of opportunities. Many formerly reasonable small and mid-cap stocks no longer attractively valued after substantial price increases through Q4 2020 and Q1 2021. |
Small Cap Mid Cap Valuation Opportunities | |
| 2020 Q4 |
InflationManager defines inflation as increase in money supply rather than traditional price measures. Believes recent money supply increases are driving high equity valuations and asset price inflation across multiple classes including real estate, equities, and bonds. |
Money Supply Asset Prices Valuations |
ValueManager seeks overweighting of value factor through bottom-up security selection. Emphasizes finding reasonably priced companies with low P/E ratios as prudent strategy given sky-high S&P 500 valuations. |
Value Factor P/E Ratios Security Selection | |
Regional BanksBanking sector trading at reasonable valuations compared to S&P 500. Favorable interest rate environment with low funding costs and higher long-end rates creating attractive net interest margins. Added Synchrony Financial position. |
Net Interest Margins Interest Rates Valuations | |
P&C InsuranceProperty and casualty insurance industry trading at reasonable valuations with price to book just over 1.1. Currently at favorable point in underwriting cycle. Added Safety Insurance Group position. |
Underwriting Cycle Price To Book Valuations |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 27, 2026 | Fund Letters | Atherean Value Fund | CSU.TO | Constellation Software Inc. | Software - Application | Systems Software | Bull | New York Stock Exchange | Acquisitions, AI disruption, Canada, capital allocation, Enterprise software, recurring revenue, Software, switching costs, Value, vertical market | Login |
| Oct 28, 2025 | Fund Letters | Christopher Gething | AMP | Ameriprise Financial, Inc. | Financials | Asset Management & Custody Banks & Custody Banks | Bull | NYSE | Asset, buybacks, compounding, Demographics, dividends, management, profitability, valuation, Wealth | Login |
| Jul 24, 2025 | Fund Letters | Atherean Value Fund | ULTA | Ulta Beauty Inc | Consumer Discretionary | Specialty Retail | Bull | NASDAQ | Beauty Retail, Consumer Discretionary, Cosmetics, growth, market share, Share Buybacks, Specialty retail, store expansion | Login |
| Jul 24, 2025 | Fund Letters | Atherean Value Fund | MO | Altria Group Inc | Consumer Staples | Tobacco | Bull | NYSE | Cigarettes, consumer staples, dividend, Free Cash Flow, Mature Business, Smokeless Tobacco, tobacco, Value | Login |
| Jul 31, 2024 | Fund Letters | Christopher Gething | MLM | Martin Marietta Materials, Inc. | Materials | Construction Materials | Bull | NYSE | aggregates, construction, inflation, infrastructure, materials, Monopolies, Nimby, Pricingpower | Login |
| Jul 31, 2024 | Fund Letters | Atherean Value Fund | SBR | Sabine Royalty Trust | Energy | Oil & Gas Exploration & Production | Bull | NYSE | Depletion, distribution income, Diversified Acreage, energy, natural gas, Oil & Gas, Permian Basin, royalty interests, Royalty trust, tax-advantaged | Login |
| Jan 31, 2024 | Fund Letters | Christopher Gething | CNI CN | Canadian National Railway Company | Industrials | Railroads | Bull | TSX | Freight, infrastructure, Networks, Nimby, Pricingpower, railroads, Transportation | Login |
| Jan 31, 2024 | Fund Letters | Atherean Value Fund | AMP | Ameriprise Financial Inc | Financials | Investment Banking & Brokerage | Bull | NYSE | Capital-light, Dividend Growth, Financial advisory, Independent Advisors, Pure-Play, ROIC, Share Buybacks, Value, wealth management | Login |
| Jan 30, 2023 | Fund Letters | Atherean Value Fund | GOOGL | Alphabet Inc | Internet Content & Information | Interactive Media & Services | Bull | NASDAQ | Acquisitions, capital allocation, digital advertising, FAANG, growth, Monopolistic, Oligopolistic, R&D, search engine, technology, undervalued, Wide Moat | Login |
| Jan 30, 2023 | Fund Letters | Atherean Value Fund | KAR | KAR Global | Other | Specialty Retail | Bull | New York Stock Exchange | asset-light, automotive, debt reduction, digital platform, high-margin, Re-rating Opportunity, Sum-of-parts, transformation, Used Vehicles, Wholesale Auctions | Login |
| Oct 31, 2023 | Fund Letters | Atherean Value Fund | CMI | Cummins Inc. | Industrials | Industrial Machinery | Bull | NYSE | capital allocation, compounder, Diesel Engines, Dividend Growth, Electric Powertrains, industrial machinery, market leader, power solutions, Trucking, Value | Login |
| Jul 28, 2023 | Fund Letters | Atherean Value Fund | CNI | Canadian National Railway | Industrials | Railroads | Bull | NYSE | Canada, Commodities, Freight, infrastructure, Intermodal, Monopoly, Precision Scheduled Railroading, railroad, Transportation, Value | Login |
| Oct 28, 2022 | Fund Letters | Atherean Value Fund | CHTR | Charter Communications | Telecom Services | Cable & Satellite | Bull | NASDAQ | broadband, cable, capital allocation, Free Cash Flow, infrastructure, MVNO, share repurchases, telecommunications, Value | Login |
| Jul 29, 2022 | Fund Letters | Atherean Value Fund | ADBE | Adobe Inc. | Software - Application | Application Software | Bull | NASDAQ | Application Software, creative software, digital media, Document management, growth, high margins, Monopolistic, Pricing power, SaaS | Login |
| Jul 29, 2022 | Fund Letters | Atherean Value Fund | LGIH | LGI Homes Inc. | Residential Construction | Homebuilding | Bull | NASDAQ | Cyclical, defensive, Entry-level Housing, Geographic Diversification, homebuilder, Housing Crisis Survivor, tangible book value, Value | Login |
| Apr 29, 2022 | Fund Letters | Atherean Value Fund | CPRT | Copart Inc | Specialty Business Services | Commercial Services & Supplies | Bull | NASDAQ | barriers to entry, Digital Auction Platform, duopoly, economic moat, high margins, international expansion, low leverage, network effects, Vehicle Salvage | Login |
| Jan 31, 2022 | Fund Letters | Atherean Value Fund | SCCO | Southern Copper Corp | Copper | Copper | Bull | New York Stock Exchange | Commodities, Copper, Electric Vehicles, infrastructure, materials, Mexico, Mining, Peru, supply constraints, Value | Login |
| Oct 30, 2021 | Fund Letters | Atherean Value Fund | CRMT | America's Car-Mart | Auto & Truck Dealerships | Automotive Retail | Bull | NASDAQ | Automotive Dealership, Conservative Capital Structure, Hybrid Model, Share Buybacks, Small Cities, South-central US, Sub-prime Finance, used car retail, Value | Login |
| Jul 29, 2021 | Fund Letters | Atherean Value Fund | ITIC | Investors Title Company | Insurance - Specialty | Insurance | Bull | NASDAQ | debt-free, family-controlled, High ROI, Regional Insurer, shareholder returns, Southeastern US, title insurance, Value | Login |
| Jul 29, 2021 | Fund Letters | Atherean Value Fund | FF | FutureFuel Corp | Specialty Chemicals | Chemicals | Bull | New York Stock Exchange | Biofuels, Chemical Manufacturing, Contrarian Value, debt-free, management ownership, margin of safety, strong balance sheet, Temporary Disruption | Login |
| Apr 30, 2021 | Fund Letters | Atherean Value Fund | PRU | Prudential Financial | Insurance - Life | Life & Health Insurance | Bull | New York Stock Exchange | buybacks, capital return, contrarian, financial services, Interest rates, life insurance, tangible book value, Value | Login |
| Jan 30, 2021 | Fund Letters | Atherean Value Fund | SYF | Synchrony Financial | Credit Services | Consumer Finance | Bull | New York Stock Exchange | consumer finance, credit cards, Equity, financial services, Interest Rate Beneficiary, shareholder returns, Value | Login |
| Jan 30, 2021 | Fund Letters | Atherean Value Fund | SAFT | Safety Insurance Group | Insurance - Property & Casualty | Property & Casualty Insurance | Bull | NASDAQ | dividend yield, Equity, Geographic Advantage, Property & Casualty Insurance, Regional Insurer, Underwriting Profits, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| CSU.TO | We took a position in Constellation Software (TSX: CSU, PINK: CNSWF). Constellation is a Toronto-based company which acquires enterprise software businesses which serve specialized niche industries. Founded by Mark Leonard in the mid-1990s, the company has spent three decades acquiring vertical market software businesses, holding them for the long term while allowing them to operate autonomously, collecting the cash flows, and reinvesting those cash flows into additional such businesses. As a result of the company's disciplined execution, it has compounded free cash flow per share at over twenty percent annualized over the three decades since its founding. As the company has a stellar reputation and is recognized by the market broadly as an elite capital allocator, it has for most of its existence traded at what we would consider to be prohibitively high valuation multiples. In entering the position, we took advantage of a substantial decline in the share price which was driven primarily by concerns that artificial intelligence would disrupt the enterprise software sector in aggregate. |
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